Most families assume that heirlooms and other valuable assets passed down from generation to generation will stay in the family if the family member that currently owns them gets divorced. However, a bitter breakup could put those assets at risk.
Individuals in the Reading, PA area who are fortunate enough to be gifted or inherit substantial assets must take care to protect those assets in the face of divorce. If gifted or inherited assets are not treated as separate property during the marriage, they may be subject to equitable division during a divorce.
What Sort Of Assets Are We Talking About?
Every single item a couple owns has the potential to become a point of contention in a nasty divorce. The biggest disputes tend to erupt over cash gifts and pieces of real property, like homes and land.
When an asset with significant value is inherited or gifted to someone who is married, that asset may or may not be considered up for grabs if the couple divorces.
Separate Property vs. Marital Property
When a Pennsylvania couple divorces, each partner keeps their own separate property, and the couple’s marital property is divided up in accordance with the state’s equitable distribution law.
Separate property is property that was acquired by either spouse before marriage, property that was received individually as an inheritance or gift and kept separate, and any property explicitly defined as separate under a valid premarital or post-nuptial agreement.
Marital property includes property that was purchased by each spouse during the marriage (regardless of who held the title), property that was acquired by the couple while they were married (such as a house or car), and retirement benefits that each spouse earned during the marriage. Small businesses and professional practices owned or operated by one or both of the individuals in the couple may also be considered marital property.
These definitions are fairly easy to follow, but there is an area of overlap. Is a gift or inheritance still considered separate property if it is used to purchase property that is used by the couple during their marriage? The answer depends on the intent of the parties, the mixing of finances, and the use of the property.
The existence of a marital agreement addressing the issue can also play an important role. In fact, the only way to be certain a gift or inheritance will remain separate property is to include it in a valid marital agreement.
Keeping Separate Property Safe
If you want to be proactive about keeping a gift or inheritance safe, or you are already on the brink of divorce, the Law Offices of Gary R. Swavely, Jr. can help you. From our office in Reading, Pennsylvania, we’ve been serving the legal needs of the people in Reading and the surrounding area for over 25 years. Contact us today to schedule a consultation.